A one-stop shop for Kuwaiti investmentJuly 25, 2018
Sheikh Meshaal Jaber Al Ahmad Al Sabah, director general of Kuwait Direct Investment Promotion Authority (KDIPA), talks to TOGY about the attractions of the Kuwaiti market and initiatives underway to ramp up its FDI inflows. KDIPA promotes and regulates FDI in Kuwait.
• On Kuwait’s approach: “Kuwait has the resolve to make its business climate more favourable to both domestic and foreign investors. It is a fundamental policy priority endorsed at the top trickling down to all the government levels.”
• On improvements to the business environment: “Kuwait witnessed the passing of several new economic laws and their executive regulations, addressing the protection of competition, combating corruption, preserving intellectual property rights, introducing new areas for privatisation and strengthening public-private partnerships.”
What makes Kuwait an attractive market in which to invest?
Kuwait continues to build on the unique attributes that it possesses, which makes it an attractive investment destination for interested investors seeking effective partnerships in strategic sectors to achieve economic and social goals that pertain to achieving Kuwait National Vision 2035 to transform the state into a world-class financial and commercial hub.
Moreover, the country’s investor-friendly laws; resilient business environment; strategic location; and robust growth in its telecoms, information technology and financial sectors underline the fact that Kuwait offers incredible value for local and foreign investors, especially in building their business footprint in the region.
The country enjoys a secure, open and dynamic projects market that welcomes inward direct investments that would complement its outward investments in numerous countries around the world led by its renowned Sovereign Wealth Fund, and leading global presence in the oil and gas sector as well as its buoyant private sector.
Kuwait remains committed to improving its investment climate with the rolled-out strategic investment opportunities valued at more than USD 100 billion in key sectors that include information and communications technology, oil and gas, renewable energy, electricity and water, urban developments and housing, healthcare, education, transport, tourism and the North Zone development [Northern Gulf Gateway project].
How has the government improved the business environment in recent years?
Kuwait witnessed the passing of several new economic laws and their executive regulations, addressing the protection of competition, combating corruption, preserving intellectual property rights, introducing new areas for privatisation and strengthening public-private partnerships. This was in addition to amending decades-old laws, such as the laws on commercial companies, commercial agencies, commercial register and tendering, among others.
It is worth mentioning, that there is also a host of new laws awaiting approval including the insolvency law, credit information law, insurance law and law for regulating the auditors’ profession.
The current reform measures carried out include establishing a national one-stop shop (Kuwait Business Centre) under the Ministry of Commerce and Industry (MOCI) with both KDIPA and the National Fund for SMEs represented in it. This led to reductions in the number of procedures and number of days and lowered the cost of the minimum capital requirement for issuing commercial licences.
This is in addition to registering property, ensuring more transparency of land administration systems and a reduction in procedures’ duration, as well as components tackling dealing with construction permits.
What is KDIPA’s role in improving the business environment?
Kuwait has the resolve to make its business climate more favourable to both domestic and foreign investors. It is a fundamental policy priority endorsed at the top trickling down to all the government levels.
KDIPA plays an active advocacy role to co-ordinate national efforts to improve the business climate as the head of the Permanent Committee for Streamlining Business Environment & Enhancing Competitiveness in the State of Kuwait (PCK), which has a membership that includes 14 other government entities, the private sector and civil society organisations.
The PCK undertakes tasks assigned to it for improving Kuwait’s business environment by launching the national reform agenda dubbed the Tahseen Program, along with the Tahseen Portal.
KDIPA also makes provisions to shorten the duration for issuance of investment licensing approvals to 30 days, set a transparent and consistent criterion for assessing applications and granting incentives to achieve intended economic impact, and establishing its One Stop Shop (OSS), a department at KDIPA created to help investors with all of their business needs that works in parallel with KBC. This department provides facilitation services to investors to ensure the best investors service delivery.
In this context, KDIPA developed its investment facilitation paradigm, in accordance with international principles, to support its promotional function. This includes designated account managers, an online investors service centre and an investors grievances committee.
What is KDIPA’s strategy to attract more FDI into the country?
The country has always been an open-market economy that formed strong trade and commercial relations, and remains a strong believer in liberalisation that allows it to maintain its dynamic and thriving nature.
In its re-emerging development narrative, the private sector has a significant role to play and investors are welcomed to partake in the opportunities available today that will enable them to build their solid operational base from the central location of Kuwait to engage with the rest of the region.
KDIPA is at the forefront as one of the economic implementation arms to exercise its role in attracting value-added direct investments into several strategic sectors such as ICT, health, education, oil and gas, banking and financial services, among others.
In this respect, KDIPA offers a host of incentives that include 100% foreign ownership to establish legal entities anywhere in the country, along with exemptions on income tax of up to 10 years, as well as Customs duty exemptions for projects, guarantees against expropriation and free transfer of capital and earnings.
KDIPA also provides all needed information, facilitation and after-care services for existing and potential investors to ensure they establish successful businesses in Kuwait’s promising market. This market is expected to further play a leading role throughout the region, capitalising on its low-risk status, balanced international relations, improving business climate and empowered, young, tech-savvy population, with a unique cultural identity.
In doing so, KDIPA maintains several key roles within its adopted promotional strategy based on mobilising all of its resources and efforts to attract powerhouse industries into new areas that focus on advanced technology and technical know-how to support economic diversification and on establishing the needed ecosystem to build the pillars of Kuwait’s knowledge economy, which aims to foster technology transfer, create jobs and training for Kuwaitis and support local content.
What are KDIPA’s key objectives for the short term?
KDIPA is keen to continue its proactive approach based on its goal of attracting value-added direct investments and improving Kuwait’s position in doing business even further.
This is conducted through 30 well-developed projects that address KDIPA strategic directions that fall under its first strategy (2017-2021), and contribute to the country’s New Kuwait pillars and its commitment to the global sustainable development goals (2015-2010), and is an integral part of the ongoing national programme for economic and fiscal sustainability within Kuwait’s current medium-term second development plan (2015/16-2019/20).
These projects and initiatives include continuing to implement various focused promotional campaigns, especially conducting investor targeting initiatives for generating investment leads, detecting signals, and forging partnerships. In parallel to this, we are working on KDIPA’s Facilitation Paradigm, which is based on adopting the principles specified in UNCTAD’s global action menu for investment facilitation, to provide continuous facilitation, investor services and after-care operations.